Is India the future for investment banks?
India is fast becoming a remote front and middle office for the banking industry.
JPMorgan’s plan to double its workforce in India and employ a further 4,500 staff there by 2007 to support its global structured finance and derivatives business is yet another sign that more highly skilled jobs on Wall Street could eventually be shipped to the subcontinent and performed for a fraction of the US cost.
This has already happened in other product areas. The days when the only services that banks outsourced or offshored to India was basic number-crunching and data entry are long gone. Investment banks have for years been outsourcing skilled middle-office and front-office jobs to India, or indeed recruiting highly skilled graduates with MBAs or MAs in finance there themselves.
Take equity research. JPMorgan was the first bank to move some of its equity research offshore to India when it hired more than 30 analysts in Mumbai in 2003, a move that has since been emulated by many of its competitors.